Diagnostics & Imaging Week Correspondent
ZICHRON YAAKOV, Israel — A whirlwind of activity, including three major conferences, has highlighted the expanded foreign interest in the Israeli medical technology sector.
For the first time, the organizing committee of Bio-Tech Israel 2005 actively sought the participation of medical device and emerging technology entities, such as nano-bio therapy. "We agreed that a holistic approach is the most effective way to address unmet medical needs," Aharon Schwartz, Bio-Tech Israel 2005 chairperson, told Diagnostics & Imaging Week. "The most comprehensive solutions converge from across disciplines to improve the human condition."
The late-May meeting drew more than 1,000 participants and 110 exhibitors, and among the sponsoring groups were the Israel Life Science Industry (ILSI) organization and the Israel National Nanotechnology Initiative (INN).
At the meeting, the Rad BioMed (Ramat-Gan, Israel) incubator announced its first annual $20,000 prize, selected from 200 entries. It was given by Rad Biomed President and CEO Idan Tamir to a Weizmann Institute of Science (Rehovot, Israel) team developing a hybrid biotech-medtech device, the antigen chip, led by its inventors, immunology professor Irun Cohen and professor of physics of complex systems Eytan Domany, along with Yeda, Weizmann's technology transfer company.
The antigen chip gives "a readout of personal antigenic history, which can predict that person's immune response and disease susceptibility or resistance, long before any symptoms manifest," Cohen told D&IW.
The antigen chip is a tiny platform, small enough to fit into a microassay plate well, yet dotted with hundreds of miniscule antigen spots. When the florescence-labeled chip is bathed with body fluids, a quantitative profile of characteristic binding of serum antibodies to hundreds of antigens is read out automatically by laser light scanning. A software program then deciphers clusters and patterns from within the masses of data generated, and the main actors are defined, in this case, just 27 antigens.
The award includes a $5,000 cash prize, free offices for a year, with legal services of patent attorneys Ehrlich & Partners (Ramat-Gan, Israel), strategic financial advice of Kesselman & Kesselman-PriceWaterhouseCoopers (Tel Aviv, Israel), and regulatory preparation and review by BioMedical Strategy Ltd. (also Ramat-Gan), plus an invitation to join the Rad Biomed incubator, said Tamir.
G. Steven Burrill, CEO of life sciences merchant bank Burrill & Company (San Francisco) told D&IW that the bank looks world-over for innovative integrated technologies. Referring to his 2005 book, Life Sciences: A Move Toward Predictability, he said that he sees integration as a welcome trend.
For example, bioinformatics will become the routine integrator of hundreds of thousands of data points to model disease based on integrated genomic/proteomic cross-field data basing, such as the prognostic biosimilation of cancer clinical trials of start-up firm Optimata (Ramat-Gan) and to the computational-medicinal chemistry with molecule modeling such as that of Israeli-born Predix Pharmaceuticals (Woburn, Massachusetts).
Leroy Hood, president and co-founder of the Institute for Systems Biology (Seattle), who personifies the concept of convergence, told D&IW that there is a need for a new, more careful and also more open communication among disciplines that traditionally have very different "language" if integration is to help attain the greatest achievements.
The mid-June IVA-Israel Hi-Tech Conference 2005: Taking Off from Seed to Exit focused on Yacov Sheinin's economic models that demonstrated the contribution of venture funds to the Israeli economy.
In 2004, Israeli venture capital funds raised $724 million in new funding, compared to just $14 million in 2003. Since 1992, Israeli venture capital funds have raised about $9.1 billion for investments in Israeli technology companies. About $5.6 billion of this total (61%) was raised during the 2000-2004 period. One of the plenary sessions, comparing biopharma and medical device investments in Israel, was chaired by Ruth Alon, general partner with Pitango Venture Capital.
Alon, who conceptualized and now chairs ILSI, was a prime mover in the effort to bring Israeli life science industry into the international focus. She acknowledged the importance of medical device and biotechnological integration for mutual scientific progress, adding that the more rapid time scale of development of medical devices could assist the value of biotechnology.
Just days before, Eli Opper, Israeli Chief Scientist from the Ministry of Industry, Trade and Labor (MoIT), had led the first official Israeli exhibition at the annual Biotechnology Industry Organization (BIO; Washington) meeting in Philadelphia, a delegation of some 30 Israeli enterprises, university technology transfer units and other government officials. Opper reiterated the proactive role being taken by the MoIT to attract foreign investment in life sciences, with the Israeli government offering attractive packages of tax benefits and other financial incentives.
The second annual Life Sciences Conference at the International Conference Center in Jerusalem, held at the end of June, was part of a week-long mission to bring Israeli life science start-ups to the attention of 100 global luminaries in medical technology and financing, who gathered in closed sessions to describe how to raise funds, to penetrate world markets and to join the next hoped-for blockbuster generation.
Nechama Novack, director of operations, Israel, for Global Capital Associates, which hosted the event, told D&IW that the vibrant Israeli life science industry is the main attraction.
Israel Life Science Industry findings indicate that 52% of the nearly 400 Israeli companies in this arena were created during the past five years, with about 50 new start-ups each year — as if the political unrest and economic woes lead the best inventors and entrepreneurs to dig deeper and hold on tighter with hopes for better times.
Amos Goren, head of the European healthcare practice of Apax Partners, which manages more than $20 billion worth of investments in late venture, growth capital and leveraged buyouts in five sectors, one of which is healthcare, led a session on how to commercialize medical device products from an Israeli base.
"There are three key factors that exist in parallel with technology development in determining commercialization strategy," he said: "The size of the market opportunity; the nature of the marketplace and competition, and the ability to attract investment and type of investors."
Goren cited Cadent Holdings (Fairview, New Jersey), a developer of novel dental imaging with a multibillion-dollar market potential. It was founded in Israel in 1995, where the company still maintains an R&D center, but "successfully developed a management and operational infrastructure in the U.S. to support their business."
Eldad Taub, Cadent co-founder and president, said that it's not easy to grow from inside Israel. Not only do U.S. financial markets prefer a U.S. presence on the ground, but it is hard to excite investment interest in the U.S. market, which does not always understand the Israeli executive style.
Yet, more than half of the $55 million Cadent has raised is Israeli-sourced, including Star Ventures, Pitango and Apax, with $25 million raised in March.
David Tolkowsky, president and CEO of superDimension (Herzliya, Israel), said that the company has been based in Israel since its founding in 1995. He told D&IW that one critical differentiating factor is that superDimension is a device- and not a service-based company.
Its breakthrough Bronchus medical technology for minimally invasive diagnosis and potential treatment of lung disease via CT-guided bronchoscopy "is the best medical device platform that is set to lead the emerging field of interventional pulmonology," said Jonathan Silverstein, general partner at OrbiMed Advisors (New York). The $5 billion healthcare asset management firm, which helped organize the gathering, last month led superDimension's second round of financing of $27 million.
Silverstein said that superDimension paralleled its technological development with managerial and sales growth since it received FDA approval in 2004. "Our interactive real-time guided endoscopic tools filled an empty and vast market niche, and we look forward to $100 million revenue within five years in the U.S. alone," he said. The opinion leaders agree, and since superDimension obtained FDA 510(k) clearance in 2004, it commenced U.S. sales and already has more than 25 commercial sites worldwide.
Silverstein said he is looking forward to other Israeli investments, a feeling generally shared by this mission, which found fertile ground for investing.